Pirates of the Caribbean 5 likely to be filmed in Queensland after federal government tax break

A tax incentive deal worth $US20.2 million has been finalised with Hollywood's Disney studio that enables the fifth instalment of the lucrative Pirates of the Caribbean franchise to be filmed in Australia.

The government had originally agreed to the tax windfall, a necessary hurdle in securing foreign film production, for another Disney-produced film, 20,000 Leagues Under The Sea.

Popular and highly profitable Disney character ... Johnny Depp's Captain Jack Sparrow could soon be sailing in Queensland waters.Credit:Disney

"The government is pleased to agree to Disney's request to enable earlier funding to be re-purposed for the production of Pirates of the Caribbean 5," a spokesman for Arts Minister George Brandis said.

The deal does not obligate Disney to produce the film in Australia, though if a small margin of additional funding can be secured from state-based film funding agencies, it would be financially lucrative for them to do so.

Other locations suggested as possible production bases for the film include Mexico.

The tax concession lightens the financial load on a foreign studio in bringing a large-scale production to Australia, particularly at a time when the high Australian dollar makes so-called "runaway production" financially cumbersome.

The fifth instalment of Pirates of the Caribbean is expected to be filmed in 2015 and released in cinemas in 2017.

The production would be based at the Gold Coast's Village Roadshow Studios, and use filming locations in far north Queensland.